Brendan Wallace is the co-founder and CEO of Fifth Wall, the world’s largest venture capital fund focused on technology for the built environment. He recently wrote some great commentary about the evolution of property technology. He is a partner at Fifth Wall, which manages more than $3 billion in capital. Following the successful IPO, which raised the company approximately $625 million and increased its shares by 42% on its Nasdaq debut, the future of DoorDash appeared bright.
Despite these positive developments, Wallace warned that the sector is still under stress. What really worried him, he said, was a dangerous market trend among real estate owners. This is their way of saying they’re deciding to deprioritize sustainability initiatives, decarbonization efforts and ESG factors. This change, according to Parr, has added to a “tangible, negative atmosphere” around climate-related proptech investments.
Wallace highlighted other emerging unicorns such as Juniper Square and Bilt. Recently, in July, Bilt raised $250 million, bringing the company’s valuation up to an astounding $10.75 billion. These advancements are positive signs for the future of property tech investing. He highlighted how a number of climate-related funds are having trouble raising capital right now in this time of turmoil.
In the majority of the last three years, Wallace said the public release environment was perhaps the most difficult he’s ever experienced. He stated, “I’d say we just lived through probably the most challenging three years that certainly I’ve ever experienced.” He pointed out that cause this turbulence to the enterprise value sheer destruction. This disruption is what happened in the property tech space from 2022-2024.
Wallace thinks there’s a silver lining. He mentioned that the amount of enterprise value creation over the last 15 months has been unprecedented, indicating a potential recovery phase for the sector. Even with this current downer vibe, he is hopeful for future investments.
“My view is the real estate industry is still responsible for 40% of carbon emissions,” Wallace emphasized. “It’s still this industry that has shirked its responsibility for years, and it’s going to cost a lot to decarbonize. It’s a lot of money, and capital is going to flow into that space … which is one of the reasons why we’re still deploying capital, because we’re the only ones.”
Wallace continues to invest in property technology as part of their innovative commitment to the industry. Moving forward, Enns thinks local governments will continue to support both sustainability and climate resilience initiatives. He was sure that all of these would eventually put upward pressure on investment and return it to the sector.
The recent IPO of ServiceTitan, a cloud-based field service management software company, serves as a positive indicator for property technology. As new companies emerge and existing ones adapt to changing market conditions, investors remain hopeful that the sector will rebound and thrive.